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| Topic 1: About Your Credit Score |
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The FICO score
is a mathematical calculation the measures
your probability to repay a loan
Measurements are
base upon a number of factors that include:
- your current outstanding debt
- places and the number of times you
have applied for credit
- the kind of credit you have taken
out in the past
- late payments in 30, 60, and 90
day increments
- over extension of your credit lines
- liens
- garnishments
- bankruptcy
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Lenders often
use the FICO score when reviewing an applicant's
request for credit
an applicant with a high FICO score will
likely receive instant approval with better
than normal rates and terms — which
means lower cost when you borrow money
view more information about the
FICO credit score:
http://www.myfico.com |
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- Scores 700 and up are considered excellent.
- Most lenders will categorized this group
as A rating.
- Scores within this group will have access
to the best interest rates and terms.
- About 60% of the U.S. population falls
within this credit rang
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- Scores 600 to 699 are considered good
credit.
- Most lenders will categorized this group
as B rating.
- Scores within this group will have access
to good interest rates, but may not qualify
for the very best interest rates and terms.
- About 27% of the U.S. population falls
within this credit range.
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- Scores 500 to 599 are considered risky
credit.
- Most lenders will categorized this group
as C rating.
- Scores within this group may still qualify
for a loan, but may have to pay at least
two percentage points or more higher interest rates than
the group in the excellent category.
- About 12% of the U.S. population falls
within this credit range.
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- Scores 499 and below are considered
very risky credit.
- Most lenders will categorized this group
as D rating — which means the applicant
may have foreclosure, liens, and credit
judgments.
- Scores within this group may still be
eligible for a loan, but may have to pay
at the maximized rates determined by State
and Federal regulations.
- About 1% of the U.S. population falls
within this credit range.
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| Topic 2: What's Inside Your Credit Report |
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Your credit report will maintain
the following information:
- Your current outstanding debt
- Places and the number of times you have
applied for credit
- The kind of credit you have taken out in
the past
- Late payments in 30, 60, and 90 day increments
- Over extension of your credit lines
- Liens
- Garnishments
- Bankruptcy
Credit bureaus report negative information
for seven years and bankruptcy information for
ten
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Who Has Access
By signed authorization through an application
or other contractual agreement, the following
parties may gain access to your report:
- Banks, credit unions, finance companies, other
lenders
- Retailers, department stores, credit card
companies.
- Landlords, utility companies, phone companies.
- Hospitals, doctors, dentists, insurance companies.
- Car dealers, mortgagers.
- Investigators, lawyers, courts.
- Any party who can offer just cause and/or
has access as a member of a credit reporting
agency.
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Why Check Your
Report
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on your car and home
mortgage if your credit report shows some questionable
activity.
Did you also know that you may be charged higher
premiums on insurance if you have questionable
credit?
And you also might be surprised that many employers
run credit checks on potential job applicants
and/or for promotions.
Your goal is to ensure that your credit report
reflects accurately your credit and financial
management skills.
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| Topic 3: 5 Reasons to Check Your Report Regularly |
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1:
Check for Errors and Inaccuracies
About 1-in-4 credit reports contain
errors that can affect a credit decision.
These errors may include human input error,
incorrect information reported about your
account, or addition of some other account
information that has a similar name or
SSN number to yours.
You should check you report at least annually
and prior to submitting a home mortgage
or other application.
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2: Tracking
Payments
The typical household will during one
month make 1 mortgage payment, 4-5 credit
card payments, 1-2 student loan payments,
1-2 auto loan payments, 4-5 utility payments,
and the list goes on.
Multiply this number of payments by 12
and you can imagine the probability that
1 or more payments were recorded incorrectly
by your creditor.
You should check your credit report to
make sure that your payments has been
properly recorded. |
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3: Identity
Theft
This is probably the main reason why
you should check your report regularly.
Identity theft occurs when someone assumes
your name and social security number to
open credit accounts, divert card statements
to another address, and drive up debts.
Identity theft can destroy your credit
and trap you into a complicated process
to clear your good name and background.
Checking your credit report regularly
can help prevent identity theft. It shows
credit activity being made in your name.
You can monitor over time whether a particular
inquiry or credit account was open without
your authorization.
We have more information
about ID Theft at our parent site: SayLending.com. |
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4: Inquiries
Every time you make a request for credit
or enter into some contractual service,
your lender or service provider may check
your credit, which places an inquiry on
your credit report. Multiple inquiries
over a short period of time can lower
your credit rating.
Your credit report will show the inquiries
made to your report. It is important to
know who has made an inquiry, whether
such inquiry was authorized by you, and
most importantly, whether any of the inquiries
are related to Identity Theft.
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5: Credit
Fraud — Unauthorized Charges
A credit report will show the credit
accounts that are still open but with
limited or zero activity.
if
someone confiscated your credit account,
how would you note any activity to the
account if the creditor has on their records
your previous address? Reviewing your
credit report allows you to catch new
activity on accounts that may be fraudulent. |
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